Top Overnight News

Iran’s ability to choke off oil flowing through the Strait of Hormuz—and use that as leverage in talks with the U.S.—is breaking down, raising the risk it will resort to military escalation to bolster its position. WSJ

Crude oil exports from key Middle East producers rebounded in September to 16.328 million barrels per day (bpd), the highest since the US-Israeli war on Iran started in late February, data from Kpler showed on Monday, as Saudi Arabia and the United Arab Emirates boosted exports. RTRS

President Trump is willing to give Iran sanctions relief and release Iranian frozen funds in return for concrete Iranian steps regarding the nuclear program, U.S. officials say. But Trump took to Truth Social Monday evening to say such reports were "untrue." Axios

Nvidia has held talks with insurance companies about shouldering the risks of lending against its chips as chief executive Jensen Huang pushes to unlock more demand for its semiconductors beyond Big Tech groups. FT

China pledged more support for its slowing economy, including tapping unused local bond quotas and expanding central bank relending. Beijing will also subsidize interest payments for first-home mortgages. BBG

A US import ban on certain Canadian motorcycles, alcoholic beverages and whey products took effect after Ottawa imposed retaliatory tariffs. The affected trade is relatively small at about $1 billion. BBG

South Korea's Finance Minister said closely monitoring the bond market and will conduct treasury bond buyback if bond yields rise excessively: BBG

Australia’s central bank has raised interest rates to the highest level in 15 years as the war in the Middle East fuels inflation and adds to economic uncertainty. The Reserve Bank of Australia on Tuesday increased its main borrowing rate by 0.25 percentage points to 4.6%, its fourth rate rise this year, as higher fuel prices fed into costs of goods and services. FT

Japan’s 40-year government bond auction drew its strongest demand in six years as elevated yields lured investors back to the nation’s longest-dated debt, offering a potential reprieve to fragile global markets. BBG

Spanish inflation rose for an eighth month in a row in September, accelerating beyond the eurozone average as its economy continues to outperform. WSJ

September’s living up to its reputation for typically being the worst month for Treasuries. History suggests October will offer little relief, especially with the US-Iran war, fiscal concerns and a hawkish Fed. BBG